Shift to EVs will reduce dependency on fossil fuelsDecember 9, 2017
Malaysia is now taking steps to bring electric cars into the auto market, with plans to shift to electric vehicles (EVs) and this could be a boost to Geely’s rush to join the pantheon of electric car makers with the likes of Tesla and others.
“This is an inevitable step for all automakers and Geely has already taken steps in that direction through developing Volvo’s EV cars.
“It has also introduced London Taxi cabs that are EV’s and its move in Malaysia will be a natural progression,” said an industry source.
Buoyed by the successful turnaround of Volvo Car AB and a major stake in Malaysia’s Proton Holdings Bhd, Geely has overseen further ambitions which were underscored again last week with its offer to buy as much as 5% of German carmaker and ambitious EV developer Daimler, Bloomberg reported.
According to Bloomberg, Geely Automobile Holdings Ltd shares have surged 270% this year, outperforming every stock on Hong Kong’s Hang Seng Index including technology darling, Tencent Holding Ltd, since the Chinese firm sped along with plans to roll-out electric cars and acquire foreign automakers.
But a Chinese government push to support a smaller automobile brand in the EV segment has sparked a rush with Geely readying its plans with Volvo with a 2019 launch target for the the Swedish carmaker’s EV model.
Commenting on possible impact of EV penetration in Malaysia, Sunway Business School economics professor Yeah Kim Leng said: “The shift to EVs is positive for the environment as well as the economy in terms of reduced dependency on fossil fuels, and the people’s health through lower exposure to hazardous air pollution, especially in congested cities.”
He said, however, while the shift will be positive for car manufacturers with EV capabilities, it will be obviously negative for conventional car makers that are unable to migrate to EV platforms.
“The growth of EVs is expected to cap the country’s fossil fuel consumption from rising further before reversing the trend as EVs exceed the conventional cars not immediately but perhaps over the next 10 to 15 years.
“An important prerequisite is investment in a network of electric-charging infrastructure, similar to the petrol stations that dot the country,” Yeah told Malay Mail.
Driven by a global policy shift to clean energy in response to global warming, EVs are seen as upending conventional fossil fueled cars, said the Sunway Business School professor.
“The technology for electric cars is advancing rapidly as global car manufacturers invest heavily to introduce EVs models to meet the rising demand spurred in part by government subsidies and emission reduction targets.
“Currently, electric and hybrid vehicles are cost competitive because of government subsidies. As technology advances and economies of scale increase to lower per unit production cost, we can expect the price to driven down to match conventional models,” he said.
Though Proton’s plans for EVs went back to the drawing board, it was inevitable that Geely will shift gear in the local market and offer energy efficient cars in the near future.
Malaysian Automotive Institute chief executive officer Datuk Madani Sahari said the National Automotive Plan 2014 (NAP2014) is structured to incentivise investment, technology development and talent enhancement at both manufacturing and aftersales sectors within the industry.
He said the NAP2014 has always had competitiveness of the entire ecosystem at its core.
“This competitive spirit is driven by consumer demand for more energy efficient transport solutions, paving the way for future demands for alternative powertrain vehicles including hybrids and electric vehicles — especially as awareness and demand for green vehicles grows within the country and the region,” he said.
Madani also said this ecosystem allows any vehicle or automotive component manufacturer to thrive in the segment.
“At the end of the day, the consumer demands form the basis for strategy formulation of all automotive businesses.
“This is the gradual liberalisation enshrined by the NAP2014 in order to create higher value jobs and business opportunities for all Malaysians,” he said.